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SAB reorganises its operations in Romania

3 April 2002

London and Johannesburg, 3 April 2002. South African Breweries (SAB) has announced a restructuring of its operations in Romania, as part of an on-going programme to improve its operating and financial performance in the country.

SAB's two Romanian companies, SC Ursus SA and SC Bere Timisoreana SA (acquired by SAB in August 2001) are to merge into a single beer company. The new company, to be called Compania de Bere Romania (CBR), once the normal Romanian company processing requirements are completed, will have its headquarters in Cluj-Napoca, branches in Timisoara, Pitesti, Buzau, Afumati and an office in Bucharest.

The main brands to be produced by CBR are Ursus Premium, Timisoreana Lux, Ursus Pils, Timisoreana Classic and Keller Lager. The current distribution networks of SC Ursus SA and SC Bere Timisoreana have already been unified into a new national network of distributors with this strong portfolio of brands.

Beer production and packaging at Pitesti brewery will cease from the end of May, although a company branch and maltings will continue to operate in Pitesti, and sales operations in the area will be unaffected. Production at SAB's three other breweries in Romania at Timisoreana, Cluj-Napoca, and Buzau will be unaffected by the reorganisation.

Altogether, 190 staff will be affected. SAB Romanian management is in consultation with the local union body over the closure of brewing operations in Pitesti and the effects of the restructuring within the company generally. Wherever possible, the company will seek alternative posts within the company for employees. Where that is not possible it will provide severance packages in line with employees' contracts and offer professional outplacement support.

Steve Woodward, SAB's country managing director in Romania said: "The new structure will help to reduce costs and increase the overall performance of the new company. Though regrettable, the closure of Pitesti Brewery is a necessary step to ensure that we maintain a leading position in a very competitive national market place and continue to focus on growing and developing our market share.

"SAB remains committed to the Romanian market. The beer industry has been very turbulent in recent times. According to the Association of Romanian Beer Producers (APBR), the market has declined by eight percent in the last 12 months and predicted future trends indicate slower recovery than desired, particularly in a climate where the excise advantage for other forms of alcohol over beer is so significantly contrary to European norms. This has caused us to make some very difficult decisions but we believe that the reorganisation we have announced today is in the best interests of the business in the long term."

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Notes to editors

1. South African Breweries plc (SAB) is the world's leading brewer in developing markets. Listed in London, SAB has interests in Africa, Central and Eastern Europe, Central America and Asia, and is the world's third largest brewer overall by volume with 108 breweries in 24 countries and over 31,000 employees.

2. In the year to 31 March 2001, SAB generated US$646 million pre-tax profit from a turnover of US$4.184 billion. SAB is listed on both the London and the Johannesburg stock exchanges.

3. SAB has been operating in Romania since 1996 and currently runs four breweries with a total capacity of 2.6 million hectolitres, employing around 1,400 people. SAB's existing operations are located in Timisoreana, Cluj-Napoca, Pitesti and Buzau.

Further inquiries:

Ciaran Baker

Head of Corporate Communications, SAB plc
+44 (0) 20 7659 0120

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